China Banks' applications for PBOC stock loan scheme exceed 200 billion yuan

Beijing lowers borrowing costs and expands financing support to encourage share buybacks and shore up market confidence.

According to Reuters, the People's Bank of China (PBOC) said on Wednesday that it had stepped up the implementation of policies supporting share buybacks and increased relending to maintain stable capital market operations.

The central bank will reduce the interest rate on relending for share buybacks and share acquisitions by 25 basis points to 1% from Wednesday.

The PBOC said banks would be allowed to add a reasonable spread to the relending rate when determining the maturity and interest rates of loans for stock repurchases and share acquisitions. The measure is aimed at accelerating loan disbursements and boosting the market capitalisation of listed companies and their major shareholders.

The PBOC, along with financial and securities regulators, had convened major banks on Monday to discuss ways to optimise the relending policy.

The latest measures underline Beijing's efforts to encourage listed companies and their major shareholders to use financial support for share repurchases and acquisitions while providing additional liquidity to support China's equity market.